TE Connectivity to acquire Richards Manufacturing to expand position in fast-growing energy market

Core Viewpoint - TE Connectivity plc has entered into a definitive agreement to acquire Richards Manufacturing Co. for approximately $2.3 billion, aiming to enhance its position in the North American electrical utilities market and capitalize on growth trends in underground electrical networks [1][5][6] Company Overview - TE Connectivity is a global leader in connectors and sensors, focusing on creating a safer, sustainable, and connected future through its broad range of connectivity and sensor solutions [8][9] - Richards Manufacturing Co. is recognized as a best-in-class provider of utility grid products, specializing in underground distribution equipment and has experienced double-digit revenue growth in recent years [2][10] Strategic Rationale - The acquisition aligns with TE's strategy to invest in long-term growth trends, particularly in the energy sector, and aims to enhance grid reliability and support the increasing energy demand in North America [3][4] - TE Connectivity has been strategically investing in its Energy business to drive growth, focusing on utility-scale renewables and innovative products for the evolving energy grid [3][4] Financial Implications - The all-cash transaction is valued at approximately $2.3 billion and will be financed through cash and additional debt [5] - TE expects the acquisition to contribute annual sales of approximately $400 million with EBITDA margins in the mid-30 percent range, and anticipates a $0.10 accretion to its adjusted EPS in the first full year post-acquisition [6] Management and Integration - The management team of Richards Manufacturing will continue to lead the business after the acquisition, ensuring continuity and leveraging their expertise in the utilities market [2][4] - The transaction is subject to regulatory approvals and is expected to close in TE's fiscal third quarter, ending June 2025 [7]